Vehicle insurance

what is vehicle insurance?

Vehicle insurance (also known as auto insurance, car , insurance or motor insurance)is insurance purchased for cars, trucks, and other vehicles. The primary use of this insuranceis to provide protection against losses incurred as a result of traffic accidents and against liability that could be incurred in an accident.

Public policy on vehicle insurance

In many jurisdictions it is compulsory to have vehicle insurance (auto insurance , car insurance , or motor insurance) before using or keeping a motor vehicle on public roads. Most jurisdictions relate to both the car and the driver, however the degree of each varies greatly.

A 1994 study by Jeremy Jackson and Roger Blackman showed, consistent with the risk homeostasis theory, that increased accident costs caused large and significant reductions in accident frequencies.

Having established what public policy on vehicle insurance(auto insurance, car insurance, or motor insurance ) let take a look at these insurance policies in various country.

Public policy on vehicle insurance in
Australia.

In South Australia,

Third Party Personal insurance from the Motor Accident Commission is included in the licence registration fee for people over 16. A similar scheme applies in Western Australia.

In Victoria,

Third Party Personal insurance from the Transport Accident Commission is similarly included, through a levy, in the vehicle insurance(auto insurance, car insurance, or motor insurance ) registration fee.

In New South Wales,

Compulsory Third Party insurance(commonly known as CTP ) is a mandatory requirement and each individual car must be insured or the vehicle will not be considered legal. Therefore, a motorist cannot drive the vehicle until it is insured. A 'Green Slip,another name CTP insurance is commonly known by due to the colour of the pages the form is printed on, must be obtained through one of the seven main insurers in New South Wales.

In Queensland,

CTP insurance is a mandatory part of registration for a vehicle. There is choice of insurer but price is government controlled in a tight band.

These state based third party insurances chemes usually cover only personal injury liability. Comprehensive vehicle insurance(auto insurance, car insurance, or motor insurance ) is sold separately to cover property damage and cover can be for events such as fire, theft, collision and other property damage.

Public policy on vehicle insurance in
Canada.

Several Canadian provinces (British Columbia, Saskatchewan, Manitoba and Quebec) provide a public vehicle insurance(auto insurance, car insurance, or motor insurance ) system while in the rest of the country insurance is provided privately. Basic vehicle insurance(auto insurance, car insurance, or motor insurance )is mandatory throughout Canada with each province's government determining which benefits are included as minimum required vehicle insurance (auto insurance, car insurance, or motor insurance ) coverage and which benefits are options available for those seeking additional coverage. Accident benefits coverage is mandatory everywhere except for Newfoundland and Labrador. All provinces in Canada have some form of no-fault insurance available to accident victims. The difference from province to province is the extent to which tort or no-fault is emphasized. Typically, coverage against loss of or damage to the driver's own vehicle is optional - one notable exception to this is in Saskatchewan, where SGI provides collision coverage (less than a $700 deductible, such as a collision damage waiver) as part of its basic insurance policy. In Saskatchewan, residents have the option to have their vehicle insurance (auto insurance, car insurance, or motor insurance ) through a tort system but less than 0.5% of the population have taken this option.

Public policy on vehicle insurance in
Hungary.

Third-party vehicle insurance(auto insurance, car insurance, or motor insurance ) is mandatory for all vehicles in Hungary. No exemption is possible by money deposit. The premium covers all damage up to HUF 500M (about €1.8M) per accident without deductible. The coverage is extended to HUF 500M (about €4.5M) in case of personal injuries. Vehicle insurance(auto insurance, car insurance, or motor insurance ) policies from all EU-countries and some non-EU countries are valid in Hungary based on bilateral or multilateral agreements. Visitors with vehicle insurance (auto insurance, car insurance, or motor insurance ) not covered by such agreements are required to buy a monthly, renewable policy at the border.

Public policy on vehicle insurance in
Ireland.

The Road Traffic Act, 1933 requires all drivers of mechanically propelled vehicles in public places to have at least third-party , or to have obtained exemption - generally by depositing a (large) sum of money with the High Court as a guarantee against claims. In 1933 this figure was set at £15,000. The Road Traffic Act, 1961 (which is currently in force) repealed the 1933 act but replaced these sections with functionally identical sections.

From 1968, those making deposits require the consent of the Minister for Transport to do so, with the sum specified by the Minister.

Those not exempted from obtaining insurance must obtain a certificate of insurance from their insurance provider, and display a portion of this (an insurance disc) on their vehicles windscreen (if fitted). The certificate in full must be presented to a police station within ten days if requested by an officer. Proof of having insurance or an exemption must also be provided to pay for your motor tax.

Those injured or suffering property damage/loss due to uninsured drivers can claim against the vehicle insurance (auto insurance, car insurance, or motor insurance ) Bureau of Ireland's uninsured drivers fund, as can those injured (but not those suffering damage or loss) from hit and run offences.

Public policy on vehicle insurance in
Romania.

Romanian law mandates Răspundere Auto Civilă, vehicle liability insurance (auto insurance , car insurance, or motor insurance )for all vehicle owners to cover damages to third parties.

Public policy on vehicle insurance in
South Africa.

South Africa allocates a percentage of the money from gasoline into the Road Accidents Fund, which goes towards compensating third parties in accidents.

Public policy about vehicle insurance in
United kingdom

In 1930, the UK government introduced a law that required every person who used a vehicle on the road to have at least third party personal injury . Today UK law is defined by the Road Traffic Act 1988, which was last modified in 1991. The Act requires that motorists either be insured, have a security, or have made a specified deposit (£500,000 as of 1991) with the Accountant General of the Supreme Court, against their liability for injuries to others (including passengers) and for damage to other persons' property resulting from use of a vehicle on a public road or in other public places.

The minimum level of insurance cover commonly available and which satisfies the requirement of the Act is called third party only insurance The level of cover provided by Third party only insuranceis basic but does exceed the requirements of the act.

Road Traffic Act Only insurance is not the same as Third Party Only insurance and is not often sold. It provides the very minimum cover to satisfy the requirements of the Act. For example Road Traffic Act Only insurance has a limit of £1,000,000 for damage to third party property - third party only insurance typically has a greater limit for third party property damage.

It is an offence to drive a car, or allow others to drive it, without at least third party insurance whilst on the public highway (or public place Section 143(1)(a) RTA 1988 as amended 1991); however, no such legislation applies on private land.

Vehicles which are exempted by the act, from the requirement to be covered, include those owned by certain councils and local authorities, national park authorities, education authorities, police authorities, fire authorities, health service bodies and security services.

The insurance certificate or cover note issued by the insurance company constitutes legal evidence that the vehicle specified on the document is insured. The law says that an authorised person, such as the police, may require a driver to produce an insurance certificate for inspection. If the driver cannot show the document immediately on request, then the driver will usually be issued a HORT/1 with seven days, as of midnight of the date of issue, to take a valid insurance certificate (and usually other driving documents as well) to a police station of the driver's choice. Failure to produce an insurance certificate is an offence. The HORT/1 is commonly known - even by the issuing authorities when dealing with the public - as a "Producer"

.

Vehicle insurance (auto insurance, car insurance, or motor insurance )is more expensive in Northern Ireland than in other parts of the UK

Most motorists in the UK are required to prominently display a vehicle licence (tax disc) on their vehicle when it is kept or driven on public roads. This helps to ensure that most people have adequate insuranceon their vehicles because an insurance certificate must be produced when a disc is purchased.

The Motor Insurers Bureau compensates the victims of road accidents caused by uninsured and untraced motorists. It also operates the vehicle insurance (auto insurance, car insurance, or motor insurance ) Database, which contains details of every insured vehicle in the country.

Public policy on vehicle insurance in
United states.

In the United States, auto insurance covering liability for injuries and property damage done to others is compulsory in most states, though enforcement of the requirement varies from state to state. The state of New Hampshire, for example, does not require motorists to carry liability insurance (the ballpark model), while in Virginia residents must pay the state a $500 annual fee per vehicle if they choose not to buy liability . Penalties for not purchasing vehicle insurance (auto insurance, car insurance, or motor insurance ) vary by state, but often involve a substantial fine, license and/or registration suspension or revocation, as well as possible jail time in some states. Usually, the minimum required by law is third party insurance to protect third parties against the financial consequences of loss, damage or injury caused by a vehicle.

Some states, such as North Carolina, require that a driver hold liability insurance before a license can be issued.

Arizona Department of Transportation Research Project Manager John Semmens has recommended that car insurers issue license plates, and that they be held responsible for the full cost of injuries and property damages caused by their licensees under the Disneyland model. Plates would expire at the end of the insurance coverage period, and licensees would need to return their plates to their insurance office to receive a refund on their premiums. Vehicles driving without insurance would thus be easy to spot because they would not have license plates, or the plates would be past the marked expiration date.

history of insurance in world

History of insurance

Introduction:
Lets start with this question. Insurance and human race which is older? Ofcourse we would say is insurance but in some sense we can say that insurance appears simultaneously with the appearance of human society. This idea about insurance can be argued but as we go on we shall get to know why insurance appeared almost same time with human race.
Now lets continue……………………….
There are two types of economies in human societies they are

1. Money economies: this type of economy deals with markets, money, financial instruments and so on.
2. non-money or natural economies: this is the reverse of the fomer type of economy that enonomies without money, markets, financial instruments and so on.

The second type is a more ancient form than the first. In such an economy and community, we can see insurance in the form of people helping each other. For example, if a house burns down, the members of the community help build a new one. Should the same thing happen to one's neighbour, the other neighbours must help. Otherwise, neighbours will not receive help in the future. This type of insurance has survived to the present day in some countries where modern money economy with its financial instruments is not widespread (for example countries in the territory of the former Soviet Union).
Turning to insurance in the modern sense (i.e., insurance in a modern money economy, in which insurance is part of the financial sphere), early methods of transferring or distributing risk were practised by Chinese and Babylonian traders as long ago as the 3rd and 2nd millennia BC, respectively.Chinese merchants travelling treacherous river rapids would redistribute their wares across many vessels to limit the loss due to any single vessel's capsizing. The Babylonians developed a system which was recorded in the famous Code of Hammurabi, c. 1750 BC, and practised by early Mediterranians.
INSURANCE HISTORY
We have been able to at this point from the above illustration about insurance infer that insurance has come so long so what we are going to focuss main;y is on the historical development of insurance.
HISTORICAL DEVELOPMENT OF INSURANCE
By historical development of insurance we refer to the development of a modern laws and market in insurance against risks.

Insurance In The Ancient World
To understand insurance in Ancient world we need to atleast know what modern insurance look like. Insurance in the modern sense (i.e., insurance in a modern money economy, in which insurance is part of the financial sphere), early methods of transferring or distributing risk were practiced by Chinese and Babylonian traders as long ago as the 3rd and 2nd millennia BC, respectively.Chinese merchants travelling treacherous river rapids would redistribute their wares across many vessels to limit the loss due to any single vessel's capsizing. The Babylonians developed a system which was recorded in the famous Code of Hammurabi, c. 1750 BC, and practiced by early Mediterranean sailing merchants. If a merchant received a loan to fund his shipment, he would pay the lender an additional sum in exchange for the lender's guarantee to cancel the loan should the shipment be stolen.
Achaemenian monarchs were the first to insure their people and made it official by registering the insuring process in governmental notary offices. The insurance tradition was performed each year in Nowruz (beginning of the Iranian New Year); the heads of different ethnic groups as well as others willing to take part, presented gifts to the monarch. The most important gift was presented during a special ceremony. When a gift was worth more than 10,000 Derrik (Achaemenian gold coin) the issue was registered in a special office. This was advantageous to those who presented such special gifts. For others, the presents were fairly assessed by the confidants of the court. Then the assessment was registered in special offices.
The purpose of registering was that whenever the person who presented the gift registered by the court was in trouble, the monarch and the court would help him. Jahez, a historian and writer, writes in one of his books on ancient Iran: "[W]henever the owner of the present is in trouble or wants to construct a building, set up a feast, have his children married, etc. the one in charge of this in the court would check the registration. If the registered amount exceeded 10,000 Derrik, he or she would receive an amount of twice as much.”
A thousand years later, the inhabitants of Rhodes invented the concept of the 'general average'. Merchants whose goods were being shipped together would pay a proportionally divided premium which would be used to reimburse any merchant whose goods were jettisoned during storm or sinkage.
The Greeks and Romans introduced the origins of health and life insurance c. 600 AD when they organized guilds called "benevolent societies" which cared for the families and paid funeral expenses of members upon death. Guilds in the Middle Ages served a similar purpose. The Talmud deals with several aspects of insuring goods. Before insurance was established in the late 17th century, "friendly societies" existed in England, in which people donated amounts of money to a general sum that could be used for emergencies.

Insurance in early world.
Separate insurance contracts (i.e., insurance policies not bundled with loans or other kinds of contracts) were invented in Genoa in the 14th century, as were insurance pools backed by pledges of landed estates. These new insurance contracts allowed insurance to be separated from investment, a separation of roles that first proved useful in marine insurance. Insurance became far more sophisticated in post-Renaissance Europe, and specialized varieties developed.
Toward the end of the seventeenth century, London's growing importance as a centre for trade increased demand for marine insurance. In the late 1680s, Mr. Edward Lloyd opened a coffee house that became a popular haunt of ship owners, merchants, and ships’ captains, and thereby a reliable source of the latest shipping news. It became the meeting place for parties wishing to insure cargoes and ships, and those willing to underwrite such ventures. Today, Lloyd's of London remains the leading market (note that it is not an insurance company) for marine and other specialist types of insurance, but it works rather differently than the more familiar kinds of insurance.
Insurance as we know it today can be traced to the Great Fire of London, which in 1666 devoured 13,200 houses. In the aftermath of this disaster, Nicholas Barbon opened an office to insure buildings. In 1680, he established England's first fire insurance company, "The Fire Office," to insure brick and frame homes.
The concept of health insurance was proposed in 1694 by Hugh the Elder Chamberlen from the Peter Chamberlen family. In the late 19th century, "accident insurance" began to be available, which operated much like modern disability insurance.This payment model continued until the start of the 20th century in some jurisdictions (like California), where all laws regulating health insurance actually referred to disability insurance.
The first insurance company in the United States underwrote fire insurance and was formed in Charles Town (modern-day Charleston), South Carolina in 1732, but it provided only fire insurance.
Insurance during Industrial revolution
Benjamin Franklin helped to popularize and make standard the practice of insurance, particularly against fire ( ie fire insurance) in the form of perpetual insurance. In 1752, he founded the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire. Franklin's company was the first to make contributions toward fire prevention. Not only did his company warn against certain fire hazards, it refused to insure certain buildings where the risk of fire was too great, such as all wooden houses.
The sale of life insurance in the U.S. began in the late 1760s. The Presbyterian Synods in Philadelphia and New York created the Corporation for Relief of Poor and Distressed Widows and Children of Presbyterian Ministers in 1759; Episcopalian priests organized a similar fund in 1769. Between 1787 and 1837 more than two dozen life insurance companies were started, but fewer than half a dozen survived.
Prior to the American Civil War, many insurance companies in the United States insured the lives of slaves for their owners. In response to bills passed in California in 2001 and in Illinois in 2003, the companies have been required to search their records for such policies. New York Life for example reported that Nautilus sold 485 slaveholder life insurance policies during a two-year period in the 1840s; they added that their trustees voted to end the sale of such policies 15 years before the Emancipation Proclamation.
Insurance is essentially a hedge against misfortune, in modern usage. In the twentieth century ‘insurance’ was also used as a form or extortion, most notably used by organized crime as a means of generating tax free income and to control businesses, populations, and politics, usually on a local level.
Until the passage of the Social Security Act, the federal government had never mandated any form of insurance upon the nation as a whole, but this program expanded the concept and acceptance of insurance as a means to achieve indidual financial security that might not otherwise be available. That expansion experienced its first boom market immediately after the Second World War with the original VA Home Loan programs that greatly expanded the idea that affordable housing for veterans was a benefit of having served. The mortgages that were underwritten by the federal government during this time included an insurance clause as a means of protecting the banks and lending institutions involved against avoidable losses. During the 1940’s there was also the GI life insurance policy program that was designed to ease the burden of military losses on the civilian population and survivors.
During the 1970’s and 1980’s there was a growth in support for the requirement for drivers to have insurance as a means of proving financial responsibility since it was recognized that the automobile, in the case of an accident, could cause significant collateral damage. It soon followed that car insurance became a mandatory requirement for all drivers.
Although insurance is neither intrinsically good or evil, historically it has a checkered history which lends a note of skepticism by the general populace towards the industry in general, although it must be noted that the insurance industry is generally a soundly profitable industry in most free market economies.

Modern health insurance
Accident insurance was first offered in the United States by the Franklin Health Assurance Company of Massachusetts. This firm, founded in 1850, offered insurance against injuries arising from railroad and steamboat accidents. Sixty organizations were offering accident insurance in the US by 1866, but the industry consolidated rapidly soon thereafter. While there were earlier experiments, the origins of sickness coverage in the US effectively date from 1890. The first employer-sponsored group disability policy was issued in 1911.
Before the development of medical expense insurance, patients were expected to pay all other health care costs out of their own pockets, under what is known as the fee-for-service business model. During the middle to late 20th century, traditional disability insurance evolved into modern health insurance programs. Today, most comprehensive private health insurance programs cover the cost of routine, preventive, and emergency health care procedures, and also most prescription drugs, but this was not always the case.
Hospital and medical expense policies were introduced during the first half of the 20th century. During the 1920s, individual hospitals began offering services to individuals on a pre-paid basis, eventually leading to the development of Blue Cross organizations.
The predecessors of today's Health Maintenance Organizations (HMOs) originated beginning in 1929, through the 1930s and on during World War II.
In the United States, regulation of the insurance industry is highly Balkanized, with primary responsibility assumed by individual state insurance departments. Whereas insurance markets have become centralized nationally and internationally, state insurance commissioners operate individually, though at times in concert through a national insurance commissioners' organization. In recent years, some have called for a dual state and federal regulatory system for insurance similar to that which oversees state banks and national banks.